240 South Pineapple Avenue, Suite 200  Sarasota, Florida  34236

You can find reports from our Investment and Research team, timely and informative financial planning topics from our Wealth Management team, and deeper dives on various important topics in our white papers from any team member. Read online, share with friends, or download for your convenience.

Chart Small Business Optimism Index

The chart above shows the Small Business Optimism Index, along with recessions, indicated by the red shaded bars. An index reading of 100 represents neutrality, meaning that small businesses are neither optimistic nor pessimistic. In August, the index hit a new all-time high of 108.8, representing an extremely positive outlook of small businesses. As the memory of the last recession fades consumers are more willing to spend and small businesses are finally seeing the benefit. However, the rapid rise in optimism to new all-time highs gives cause for concern. While economic data continues to look good, there are growing concerns that the economic expansion could be hitting peak growth. While a recession may not be right around the corner, weaker growth could begin to negatively impact confidence levels.

DSC01844 PaulCantor 72DPIPaul B. Cantor CFA / CFP® / AIF®, Principal, Chief Operating Officer, CERTIFIED FINANCIAL PLANNER™

I arrived at Allegiant in a somewhat circuitous fashion. I had come to Sarasota to visit my dear friends Marty and Chris. We have been friends since our college days at the University of Rochester. Despite distance and careers, we had always stayed in touch. I had recently retired from a 30-year career in Investment Management on the institutional side of Wall Street. I was a card-carrying member of Workaholics Anonymous but had decided to leave it all behind. I had spent the last 20 plus years working at hedge funds as a trader, analyst, and portfolio manager. Operating at the highest levels of financial competition had been professionally and financially rewarding, but I did not want to become the richest person in the graveyard. So, I left Manhattan, where I had grown up and spent my entire career, and moved to the East Coast of Florida.  

I was 50 years old and hoping that the move would be positive for my wife and me. During the visit, Marty asked me what I was going to do when I grew up. We talked shop, and after many months of discussions we hatched the idea for me to join Allegiant. It was an opportunity for me to work with a friend to help grow a business, mentor the next generation of our professionals, and help create the foundations for a company that would excel and grow long after its founders - the partners at Kerkering Barberio, Marty Kossoff, and Conni Arledge (who retired last year from Allegiant) – were gone. We wanted the company to have a strong culture of caring and compassion that functioned with preeminent professional excellence in the wealth advisor role. How could I pass up an opportunity and challenge like that? In May of 2014, I officially started as Chief Operating Officer of Allegiant Private Advisors, and it’s been one of the best decisions in my life.  

By Phoebe Trumpler, CPA and Shareholder at Kerkering Barberio 

We are fortunate to present this article on foreign tax reporting requirements written by Phoebe Trumpler, CPA and Shareholder at Kerkering Barberio. The Allegiant Private Advisors team is proud of our 22-year partnership with Kerkering Barberio, one of the leading independent accounting firms in Florida. Through KB, Allegiant advisors have access to top-notch tax advice for our clients, and in this article, Phoebe outlines just some of the considerations necessary if you’ve lived, worked, or invested overseas. 

Before 2011 if a U.S. taxpayer had offshore financial assets, world-wide income was supposed to be reported, bank and brokerage accounts offshore were supposed to be disclosed on the Foreign Bank Account Report (FBAR), and certain other informational and compliance reporting was required. There wasn’t a great deal of IRS scrutiny and there were known tax havens around the world for those who wanted secrecy. Attitudes and awareness changed in 2011 with the new U.S. Foreign Account Tax Compliance Act (FATCA). 

Change was actually in the wind several years before that. In 2007 Bradley Birkenfeld, an American private banker working in Switzerland, disclosed to the U.S. Department of Justice information about violations by U.S. clients at UBS Geneva using Switzerland’s secret banking laws. He received a reported $104 million under an IRS whistleblower program as well as a prison term and a fine of $30,000 for his role in the violations. His disclosures ultimately led to the UBS Geneva release of previously privileged information on U.S. tax evaders. FATCA became law. Over the next decade taxpayers and CPAs alike learned that ignorance is no longer bliss when it comes to reporting world-wide income and offshore financial assets. 

Let’s talk about some often-overlooked offshore reporting: 

Coming out of the 2008 global financial crisis, investors valued U.S. and international markets similarly. However, throughout the subsequent expansion the valuation gap progressively widened, with the U.S. holding a premium over international equities. The top panel of the chart above displays the price to earnings multiple of the Russell 3000 and the MSCI ex U.S., which represent the U.S. and international markets, respectively. The bottom panel represents the relative premium or discount given to the U.S. market compared to international markets. As shown, U.S. markets currently carry a 40% premium to international markets. 

Chart Diverging Valuations

In recent years many investors believed the prospects for increased coordinated global growth would lead to a narrowing of this premium gap. However, the gap has widened further in 2018 as trade uncertainty, country specific risk, emerging market currency issues, and stagnation of key international economies have caused international valuations to decline. The current premium gap represents one of the largest premiums over the past few decades. It is quite possible that over time this valuation gap may return to historical averages. How valuations converge, whether through changes in earnings or changes in prices is something we are watching closely.      

by Chief Investment Officer Benjamin W. Jones, CFP®, AIF®

AllegiantPA Economic Dashboard Portrait September 2018
Our Economic Dashboard remains completely green. However, prudent investors should always prepare for the next downturn. And, just as you prepare for a hurricane when things are calm at the start of hurricane season, investors should prepare for a market downturn when markets hit all-time highs. We are entering the investment world’s equivalent of hurricane season. 

As such, Allegiant developed our own proprietary Pre-Recession Checklist utilized for each and every client. Click here for more details.

Chart Expectations vs Current Situation

With U.S. consumer confidence hitting an 18-year high this past month, it is safe to say that Americans are feeling pretty good about the current economic environment. However, if you look below the surface, this extreme level of optimism may actually be a cause for concern. The chart above shows the spread between how confident consumers feel about their current situation compared to how confident they feel about the future (current situation – future expectations), while the red shaded vertical lines indicate recessions and how long they lasted. What is interesting is that when the spread between these two widens significantly, generally a recession follows shortly thereafter. As of today, we are seeing the second widest gap between the indicators in history, surpassed only by a reading during the Tech Boom of the late 1990s. This chart is a great reminder that when everyone around you is feeling extremely confident about the economy, it is wise to step back and remember that all economic booms come to an end at some point. While the majority of economic data in the U.S. still remains robust, the team at Allegiant understands that at some point the economic tide will turn, and we will make changes to our client portfolios along the way to ensure that they are ready for whatever the next few years may bring.

As financial professionals, we are frequently reminding people that the future is uncertain. In discussions of the investment market, we hear others say that there’s no crystal ball, that they are only making an educated guess, or, as a favorite economist once put it, “To make a good prediction, state what is going to happen, or when it’s going to happen, but never both.” While most investors understand that the lack of predictability in the markets is inherent, we often overlook the fact that our own futures are equally unpredictable. Financial plans, the gold standard of many advisors, require intensive budgeting, predictions of future spending, and understanding how you will feel about risk and safety in the future. These inputs are then used in conjunction with scenario analysis to determine how achievable your goals truly are. As with any engineering, the better the inputs, the better the outputs. However, like the markets, not one of our clients has a crystal ball that enables an accurate vision of your future life. So, if the actual result will certainly be different then the predicted outcome, why go through a financial planning process at all? There are a few very good reasons. 

The phrase “avoid probate” is well-known in the legal and financial industries. However, the average individual is often left without an explanation or understanding of what probate actually is and the related proceedings. Probate is the public legal process that takes place after an individual’s death when court proceedings properly distribute a deceased person’s assets to the rightful beneficiaries. Leaving a will directs the probate court to carry out the specific directions as listed within the will. If a will does not exist or is not found, then it is the court’s duty to ensure that all assets are distributed according to the state’s laws and statutes, which is almost always a sub-optimal outcome for the family and heirs. One of the primary reasons why individuals may want to avoid probate is the total lack of privacy. Generally, there remain no restrictions for the public to access the proceedings and filings. Family assets long kept private are suddenly open to the public. Probate is also costly: on average, costs may range between 5 to 10% of the gross estate value. Expenses can include appraisal and attorney fees, federal and state estate taxes, and other unforeseen expenses. Lastly, the probate process is lengthy. In general, the larger and more complex the estate, the more time it takes for the courts to finalize distributions to beneficiaries. 

Over time, insurance companies have altered their products so that now there are numerous plan options and an all-time high level of complexity. Combined with a lack of consumer familiarity with insurance jargon and contract language, making a purchasing mistake has, ironically, never been easier. Priority, however, should always be placed on selecting the correct product with the appropriate characteristics to best match each individual’s need. This short piece will focus on term insurance, perhaps the easiest form of life insurance in many situations.

APA Comerford 3x4LO RGBSeptember 2018 marks my one-year anniversary as an Allegiant Private Advisors team member. I am proud to work with a talented group of people who are without exception committed to high standards of performance.

As the newest member of the Operations team, I enjoy my role as an Operations Specialist as it allows me to interact with our clients daily. We are very fortunate to have clientele that feel like our extended family.

I am originally from Bryn Mawr, Pennsylvania. My family spent Thanksgiving and Easter holidays each year in Sarasota beginning in 1994; therefore, I am very familiar with Sarasota. Once I completed my Master’s degree I knew that I wanted to reside here and relocated in December 2016. I am approaching my two-year anniversary of living in this vibrant, beautiful city and I couldn’t be happier. I love everything the city of Sarasota has to offer from the beautiful beaches to the artsy culture the city exudes.

I hold a B.A. in History from Marywood University where I was an active member and treasurer of the History Club. As an undergraduate, I interned for Pennsylvania's United States Senator and spent the summers between my junior and senior years interning in Washington, D.C. For me, as a History major, this was an experience I will never forget! My internship responsibilities were focused on working with Pennsylvania veterans which I found extremely rewarding.

During my senior year of college, I applied to graduate school and was offered a full academic scholarship and graduate assistantship at Villanova University, graduating in May 2015. I attended graduate school in the evenings and was employed as a Graduate Assistant/Teaching Assistant in the Liberal Arts department. It was a great learning experience for me as I was able to assist teaching undergraduate History courses, assist professors with literature reviews and work alongside faculty preparing presentations for national academic conferences.

I really enjoyed the field of academia; however, I had a strong desire to have a role in the business/finance industry since my father and grandfather were both stock brokers. I am pleased to have found a happy home at Allegiant Private Advisors and Sarasota.

Page 1 of 8